David Zott, an attorney for a litigation trust, delivered a
closing argument today in a trial started in May in U.S.
Bankruptcy Court in Manhattan over the unit’s sale. The trust is
charged with pursuing claims stemming from the deal on behalf of
Tronox creditors.

Tronox, previously under bankruptcy protection, alleges
that Anadarko’s Kerr-McGee unit made the company insolvent by
stripping away valuable oil and natural-gas assets and saddling
it with legacy costs for environmental remediation.

Kerr-McGee spun off part of its business as Tronox before
selling itself to Anadarko for $18.4 billion in 2006.

Zott told U.S. Bankruptcy Judge Allan Gropper today that
Kerr-McGee knew that environmental liabilities were an obstacle
to a merger.

“They knew they were big,” he said. “They knew they were
an impediment, and they wanted to get a clean break.”

The trial, conducted in increments, began with the trust
seeking damages of at least $14 billion, according to court
papers.

In January, Gropper ruled that damages would not be capped
in the case and said they could be as high as $15.5 billion,
under one calculation method. Gropper will decide whether his
decision in the case is binding.

‘Sensational’ Allegations

Kerr-McGee called the allegations in the suit
“sensational” in a brief filed Nov. 21. Kerr-McGee believed
Tronox was solvent, worth more than $1 billion and “poised to
succeed,” according to the filing.

“It ultimately failed only because of an unprecedented
adverse business climate,” the company said. “And when those
business headwinds came, Tronox was open and candid with
investors about the challenges it faced -- and never once
mentioned the legacy liabilities as among them.”

Tronox, the world’s third-largest producer of the white
pigment titanium dioxide, filed for bankruptcy in January 2009.
It implemented a confirmed reorganization plan in February 2011
that created the trust to prosecute the suit, which alleges
fraudulent transfer claims.

Anadarko, based in The Woodlands, Texas, was a defendant in
the suit until May when Gropper threw out the trust’s claims
against the parent. The judge said that Tronox’s fraudulent
transfer theories only worked against Kerr-McGee, Anadarko’s
wholly-owned subsidiary.

The lawsuit is Tronox Inc. v. Anadarko Petroleum Corp. (In
re Tronox Inc.), 09-1198, U.S. Bankruptcy Court, Southern
District New York (Manhattan). The Chapter 11 case was In re
Tronox Inc., 09-10156, in the same court.